This article is short, yet hopefully informative. However, if you just want to talk to me personally about
purchasing your first home, I completely understand that! Call "JT" Prevatte at (910) 494-5570, and I will guide
you in the direction you will need to go.
What would a North Carolina First Time Home Buyer Qualify For?
When buying a home for the first time, obviously the most important question to ask yourself is "How much can
we afford?" Your mortgage company will have a simple mathematical equation to determine exactly how much
home you can buy. However, you can calculate it yourself, right now, before you even speak with a mortgage
company. (This is purely for the sake of illustration. When speaking to a professional loan officer, you may find
that you qualify for more or less than this example shows-- but this will get you close.)
When qualifying for your "first North Carolina home", your loan officer will ask you what your gross monthly
salary is. For example, if you earn $48,000 per year, your monthly salary would be $4000. If you are married,
or buying your home with another person, the loan officer would add both of your salaries together. So let us
say that there are two first time home buyers and each earns $48,000 per year for a total of $96,000. (Of
course you can earn less than this and still buy a home, we are just using these numbers as an example.)
Okay, so now what?
The loan officer will take the $96,000 and divide it by twelve months. That gives him or her $8000 per month to
work with. FHA allows a borrower to qualify for up to 44% of their monthly salary. You are not qualifying for the
total amount of the loan; you are qualifying for the monthly payment.
So we take the $8000 and multiply it by .44 or 44%. FHA wants all of your bills to total up to 44% (or less) than
what you actually earn.
That gives us $3520 per month that we can spend on our first home. But hold on just a second! We still
have to subtract out other expenses. Remember, FHA wants 44% to include all of your bills.
Let's say each one of the borrowers has a car payment of $350 per month. We must take out $700 from what
we can afford. That leaves us $2820.
Do you have student loans? Let's say one of the borrowers has a student loan payment of $200 per month.
Also, let us say that they have four credit cards between them and each one has a minimum monthly payment of
$100. (Cell phones and utility bills do not count. Only loans.)
The credit cards and student loan brings us down another $600 per month, so we subtract that out and that
leaves us $2,220 to buy our new home. Not bad!
Are we there yet? Not quite. Everybody who owns a home has to pay yearly property taxes and insurance.
There is no way for us to guess how much either of those will cost for you. If you are a North Carolina first time
home buyer, just call "JT" Prevatte at (910) 494-5570, provide him the address of the home that you would like
to buy and I can tell you the property taxes.
As far as insurance goes-- just count on $50 - $100 per month. It depends upon your claim history, what
company you go with, etc. There are many factors. Whomever holds your auto insurance policy should be the
first agent you call. Usually you will get a discount for holding multiple policies (car, home, life, etc.). After that,
call two or three others and just go with the lowest.
Tip: Make sure they are all offering you the same coverage.
So we still have to subtract for property taxes and homeowners insurance from our $2220. Let's subtract $420
to keep the numbers easy. It will most likely be less, but why max ourselves out?
We have $1800 per month to pay off a mortgage loan. That's great! At current interest rates, which are
hovering around 5.5%, that monthly income would qualify you for approximately $275,000 -- no problem.
However, as interest rates go up, the amount you could afford (the $275,000) will go down. This is why it is
vitally important to buy real estate-- first time home buyer or not-- right now, while the rates are low. In having
the vision to buy a home now, when interest rates are at historic lows, you are making a very intelligent financial
decision that will impact the rest of your life.
If you have good credit, don't worry about the FHA maximums. You can get a conventional mortgage loan in
that case.
Ask "JT" if he can refer you to a lender that will you give you more information on this.
If you are an North Carolina First Time Home Buyer call "JT" Prevatte today and find the perfect dream home in
your exact price range. "JT" Prevatte's cell phone number is (910) 494-5570.
purchasing your first home, I completely understand that! Call "JT" Prevatte at (910) 494-5570, and I will guide
you in the direction you will need to go.
What would a North Carolina First Time Home Buyer Qualify For?
When buying a home for the first time, obviously the most important question to ask yourself is "How much can
we afford?" Your mortgage company will have a simple mathematical equation to determine exactly how much
home you can buy. However, you can calculate it yourself, right now, before you even speak with a mortgage
company. (This is purely for the sake of illustration. When speaking to a professional loan officer, you may find
that you qualify for more or less than this example shows-- but this will get you close.)
When qualifying for your "first North Carolina home", your loan officer will ask you what your gross monthly
salary is. For example, if you earn $48,000 per year, your monthly salary would be $4000. If you are married,
or buying your home with another person, the loan officer would add both of your salaries together. So let us
say that there are two first time home buyers and each earns $48,000 per year for a total of $96,000. (Of
course you can earn less than this and still buy a home, we are just using these numbers as an example.)
Okay, so now what?
The loan officer will take the $96,000 and divide it by twelve months. That gives him or her $8000 per month to
work with. FHA allows a borrower to qualify for up to 44% of their monthly salary. You are not qualifying for the
total amount of the loan; you are qualifying for the monthly payment.
So we take the $8000 and multiply it by .44 or 44%. FHA wants all of your bills to total up to 44% (or less) than
what you actually earn.
That gives us $3520 per month that we can spend on our first home. But hold on just a second! We still
have to subtract out other expenses. Remember, FHA wants 44% to include all of your bills.
Let's say each one of the borrowers has a car payment of $350 per month. We must take out $700 from what
we can afford. That leaves us $2820.
Do you have student loans? Let's say one of the borrowers has a student loan payment of $200 per month.
Also, let us say that they have four credit cards between them and each one has a minimum monthly payment of
$100. (Cell phones and utility bills do not count. Only loans.)
The credit cards and student loan brings us down another $600 per month, so we subtract that out and that
leaves us $2,220 to buy our new home. Not bad!
Are we there yet? Not quite. Everybody who owns a home has to pay yearly property taxes and insurance.
There is no way for us to guess how much either of those will cost for you. If you are a North Carolina first time
home buyer, just call "JT" Prevatte at (910) 494-5570, provide him the address of the home that you would like
to buy and I can tell you the property taxes.
As far as insurance goes-- just count on $50 - $100 per month. It depends upon your claim history, what
company you go with, etc. There are many factors. Whomever holds your auto insurance policy should be the
first agent you call. Usually you will get a discount for holding multiple policies (car, home, life, etc.). After that,
call two or three others and just go with the lowest.
Tip: Make sure they are all offering you the same coverage.
So we still have to subtract for property taxes and homeowners insurance from our $2220. Let's subtract $420
to keep the numbers easy. It will most likely be less, but why max ourselves out?
We have $1800 per month to pay off a mortgage loan. That's great! At current interest rates, which are
hovering around 5.5%, that monthly income would qualify you for approximately $275,000 -- no problem.
However, as interest rates go up, the amount you could afford (the $275,000) will go down. This is why it is
vitally important to buy real estate-- first time home buyer or not-- right now, while the rates are low. In having
the vision to buy a home now, when interest rates are at historic lows, you are making a very intelligent financial
decision that will impact the rest of your life.
If you have good credit, don't worry about the FHA maximums. You can get a conventional mortgage loan in
that case.
Ask "JT" if he can refer you to a lender that will you give you more information on this.
If you are an North Carolina First Time Home Buyer call "JT" Prevatte today and find the perfect dream home in
your exact price range. "JT" Prevatte's cell phone number is (910) 494-5570.
| Jeffery "JT" Prevatte Realtor, ABR Relocation / Recruitment Director (910) 494-5570 MyNewNCHome@gmail.com |
| Attention Buyers - Have You Heard About the New $8,000 Tax Credit for Buying a Home? Good until December 1, 2009! There has never been a better time to be a BUYER! Click here for Frequently Asked Questions About the First-Time Home Buyer Tax Credit NOTE: The law defines "first-time home buyer" as a buyer who has not owned a principal residence during the three-year period prior to the purchase. |
 |  |  |  |